Japan Stocks Drop as 900 Shares on Topix Go Ex-Dividend

Sept. 26 (Bloomberg) -- Japanese stocks fell, with the
Topix Index falling the most since May 18, as more than 900
companies on the Topix trade ex-dividend today, and amid concern
stimulus from central banks in the U.S., Europe and Asia won’t
do enough to revive global economic growth.

NTN Corp., one of companies on the Topix that is trading
without rights to a dividend from today, sank 5.8 percent. Funai
Electric Co., an audio-visual equipment maker that gets half its
sales from North America, lost 2.7 percent after the president
of the Federal Reserve Bank of Philadelphia said more bond
purchases by the central bank won’t boost growth. Sony Corp.
slid 4.5 percent after Standard & Poor’s cut the consumer-electronics maker’s credit rating.

The Topix fell 2 percent to 742.54 at the 3 p.m. close in
Tokyo, with more than twice as many shares declining as
advancing. The Nikkei 225 Stock Average lost 2 percent to
8,906.70, with volume 6.8 percent below the 30-day average for
the time of day.

“Monetary easing isn’t something that will create
demand,” said Goya Nakao, a senior investment manager at Sompo
Japan Nipponkoa Asset Management Co., which oversees about 5
trillion yen ($64 billion). “Catalysts for a market rebound are
missing. While there’s some improvement in sentiment in Europe
after the European Central Bank’s comments on stimulus, the U.S.
economy is weakening amid an uncertain outlook and the timing of
a rebound in China is being pushed back.”

Attractive Dividends

The Topix has fallen 15 percent from this year’s high on
March 27. The decline drove the dividend yield for the gauge up
to 2.5 percent, more than three times the rate of the benchmark
10-year government bond. The Standard & Poor’s 500 Index yields
just 1.2 times the government 10-year note, while Germany’s DAX
offers 2.3 times and Australia’s S&P/ASX 200 pays 1.6 times.

NTN and Nippon Paper Group Inc. are among companies that
went ex-dividend today. NTN, a bearing maker planning to pay a
first-half dividend of 5 yen per share, lost 5.8 percent to 163
yen. Nippon Paper, which projects an interim dividend of 10 yen,
slipped 3.1 percent to 956 yen.

Futures on the S&P 500 added 0.1 percent today. The gauge
yesterday fell for a fourth day, retreating 1.1 percent for its
biggest decline since June 25, after Federal Reserve Bank of
Philadelphia President Charles Plosser said new bond buying
announced by the Fed this month probably won’t boost growth or
hiring and may jeopardize the central bank’s credibility.

Euro Falls

Shares also fell after the euro weakened to as low as 99.99
yen today, trading near the lowest level since Sept. 13, before
reports that may show declines in Italian retail sales and
French consumer confidence. The shared currency was also under
pressure as Spanish Prime Minister Mariano Rajoy faced calls for
early elections and an international bailout of his nation.

Brother Industries Ltd., an office-equipment maker that
counts Europe as its biggest market, lost 2.6 percent to 746 yen.
Kyocera Corp., an electronics maker that gets almost 20 percent
of its sales in the region, slid 2.2 percent to 6,560 yen.

“We are tactically bearish on risk assets,” Kevin Gaynor,
the head of macro-strategy research at Nomura Holdings Inc.,
Japan’s largest brokerage, said in Sydney today. “Economic
growth is going to disappoint substantially over the next three
or four months.”

The People’s Bank of China yesterday reiterated it will
pursue prudent monetary policy, according to a statement posted
to its website following a quarterly meeting of its monetary
policy committee.

China’s central bank yesterday added a record 290 billion
yuan ($46 billion) to the financial system using reverse-repurchase agreements, seeking to address a cash squeeze in the
run-up to a weeklong holiday.

Tankan Report

The Bank of Japan’s Tankan report is expected to show the
nation’s biggest manufacturers grew more pessimistic this
quarter as China’s slowdown and Europe’s crisis sapped exports,
putting pressure on the central bank to add to this month’s
surprise monetary stimulus.

The Tankan, due on Oct. 1, will show that business
confidence deteriorated for the fourth straight quarter,
according to the median estimate of 12 analysts in a Bloomberg
News survey. That would mark the longest string of negative
readings since Japan emerged from the global recession in 2010.

Toyota Motor Corp. fell along with other automakers on
mounting concerns about the fallout from a territorial dispute
between Asia’s two biggest economies.

Toyota, Asia’s biggest carmaker, slumped 2.7 percent to
3,100 yen, while Nissan Motor Co., the top Japanese seller of
vehicles in China, slid 2.6 percent to 664 yen after the two
carmakers cut production in China in August after anti-Japanese
protesters damped demand in the world’s largest vehicle market.